Young Consumers Shy Away from E-Commerce

While teens frequently access the Internet, spend a significant amount of time online, and hold sizeable purchasing power, they rarely go online to shop, according to a recent survey by PricewaterhouseCoopers. About one-fourth of teen Internet users regularly go online to shop, but only 2 percent claim shopping is their primary reason for going online.

Teens do not access the Internet as often as adults, but they are no strangers to the technology. The survey found that households with teens are more likely to have Internet access compared to all households.

Reasons Teens Go Online
Send/receive email 83% 44%
Research/get information 68% 19%
Play games 51% 10%
Use chat rooms 40% 10%
Download music/videos 38% 6%
Send electronic greeting card 31% 0%
Shop 26% 2%
Read news/sports/other 23% 4%
Other 19% 5%
Source: PricewaterhouseCoopers

“E-retailers who capture teens’ attention can tap into a market of Internet savvy customers whose purchasing power is sizeable today and will undoubtedly increase in years to come,” said Mary Brett Whitfield, Principal Consultant and Director of the PricewaterhouseCoopers E-Retail Intelligence System®.

Thirty-eight percent of teenage Internet users access the Web more than once a day, compared with 52 percent of adult Internet users. Another 24 percent of teens get connected once a day, while 8 percent access the Internet less than once a week. But when teens access the Internet, they stay online. The challenge for e-retailers is to capture their attention. Survey results indicate that more than 25 percent of teens with Internet access stay online for at least an hour during a typical visit. The duration of the online visit corresponds directly with access frequency. Teens accessing the Internet more than once a day are significantly more likely to spend an hour or more online per visit. Conversely, teens accessing the Internet on a weekly basis are significantly more likely to spend less than 30 minutes online.

Survey results also show that while teens access the Internet for a variety of reasons, shopping is seldom one of them. In fact, most teens regularly go online to send or receive email and nearly half indicate that email is the primary reason they go online. While just over one-fourth of online teens cite shopping as a reason for regularly going online, only 2 percent indicate that shopping is their primary reason for going online.

Teen Internet users have a much lower online purchasing rate than adult Internet users, the survey found. Thirty-one percent of teens with Internet access have purchased a product from an online shopping site vs. 76 percent of online adults Internet users. Another 25 percent of online teens have shopped online, but have never made a purchase.

A comparison of teens and adults in the top five categories ever purchased online reveals both similarities and differences. The most significant difference is that clothing moves up from the number five spot on the adult list to the number two spot on the teen list — an obvious opportunity for teen apparel retailers.

In addition to purchasing opportunities, online shopping sites offer teens the ability to participate in a variety of other activities and some 70 percent of teen Internet users take advantage of these activities. Survey results indicate that roughly 40 percent of teens have signed up to receive email or online newsletters; read articles such as CD/movie reviews, celebrity interviews, or fashion advice; and searched for stores carrying a particular brand or product.

Top Five Categories Ever Bought Online
1. CDs/cassette tapes
2. Clothing
3. Books
4. Computer software
5. Toys
1. Books
2. CDs/cassette tapes
3. Computer software
4. Toys
5. Clothing
Source: PricewaterhouseCoopers

“The fact that most teenagers are not independent consumers presents e-retailers with a unique set of challenges,” Whitfield said. “When teen Internet users were asked to identify the three biggest challenges they have with online shopping, parents not letting them make online purchases topped the list. This suggests that online retailers seeking to capture a teenage market may want to make an effort to target parents as well.”

Parental restrictions and the inability to touch or try products before purchasing were the two biggest problems teens associated with shopping online. Other significant concerns include returning products if not happy with the purchase, the inability to pay for products online and privacy issues. Very few teens admitted to having no problems with online shopping.

While parental permission and the ability to pay for products online are major barriers to online shopping, 78 percent of teens’ purchases are paid for using a parent’s credit card.

“E-retailers have the opportunity to develop some creative methods to ‘e-commerce enable’ teens,” Whitfield said. “Digital wallets and other prepaid online spending accounts may take the risk away from parents who are hesitant to give teenagers access to their credit cards, while giving teenagers budgetary responsibilities.” However, survey results indicate that one in five teens indicate that nothing would make them more likely to purchase online in the future.

As children get younger, they are even less likely to include shopping as a reason to go online. According to a survey of 8 to 12 year olds with home Internet access by Zandl Group, only 22 percent list shopping or buying as a reason for going online.

What Kids Do Online
Age 8 to 12
Play games 80%
E-Mail 72%
Chat/message boards 58%
Schoolwork 54%
Download music 42%
Shop/Buy Stuff 22%
Enter contests 18%
Source: Zandl Group

The Zandl Group survey also found some signs of an e-commerce future among younger Internet users. Half of them have checked out something online and then gone to a store to buy it. For these kids, the barriers to online purchasing include parental permission (56 percent), the risk of buying something without examining it first (36 percent), access to credit cards (32 percent), high prices (20 percent), confusing procedures (16 percent), and the difficulty of returning merchandise (14 percent).

One-fourth of kids have purchased something online–primarily accessories, clothes, CDs, and books. For these kids, the advantages of shopping online include bargains/low prices, convenience, and merchandise they cannot easily buy in stores.

The PricewaterhouseCoopers E-Retail Intelligence System surveys more than 500 Internet users regarding online shopping behavior and attitudes and Internet usage. The most recent survey was fielded from April 26 to May 2 among teenagers 13 to 18 years old in online households, using NFO’s Interactive Panel.

Zandl Group findings are based on surveys of Zandl Group Consumer Panel members, a network of 3,000 young people between the ages of 8 and 24.

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